Make money via SIP investment: After making a monthly investment of just Rs 500, you can earn Rs 1.25 lakh in the next 10 years, if you regularly follow the methods that are being told. Although it is also true that the stock market is subject to risk and investment in it should be done based on one’s own risk and wisdom, despite this, the possibility of not getting the desired ROI is always strong. The method we are talking about adopting under the above headline is SIP.
What is SIP, which makes money for you
SIP means Systematic Investment Plan. As its name suggests, SIP is a regular and systematic way of investing. Under this, a small but pre-determined amount is allocated for investment in the stock market at regular intervals (usually every month). This is considered to be a preferred method of investing in equities because the risk is handled very delicately and effectively, which is possible despite investing money in the market. Now the question arises that how does it convert your few hundred rupees into lakhs? Let us understand this.
What is the meaning of SIP, understand…
SIP actually works for two things, firstly, Rupee Cost Averaging and secondly, compounding. SIP helps you in protecting yourself from market volatility by eliminating the guessing game of market performance and in the long term, the average purchasing cost becomes even-out. When the market is rising, you get fewer units, and when the market is falling, you get more units. This reduces your risk and you get the investment at a lower average cost per unit.
Make Rs 1.25 lakh by investing Rs 500 monthly, this is the calculation
For example, if you make a SIP investment of Rs 500 per month and you make this investment every month continuously for 10 years, then you can get a good amount of money as returns on it. According to the average return percentage of 12 percent, you get interest of Rs 56 thousand 170 on the investment amount of Rs 60 thousand. In this way your total money becomes Rs 1 lakh 16 thousand 170.
